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Pre-Market: Citigroup Could Pay $7 Billion Fine to Resolve Mortgage Probes; China's PPI Sends Asian Stocks Lower


Apple files a patent for an all-glass iPhone.

Stock futures pointed toward a higher open on Wednesday. Before the opening bell, Dow Jones (INDEXDJX:.DJI) futures rose 0.11% to 16,879. Nasdaq (INDEXNASDAQ:.IXIC) futures moved higher, rising 0.13% to 3,868.25.  Futures on the S&P 500 (INDEXSP:.INX) were up 0.13% to 1,963.


Citigroup (NYSE:C) will reportedly pay $7 billion to settle allegations that it defrauded investors to the tune of billions of dollars through mortgage-backed securities before the 2007-2008 financial crisis, Reuters reports. An announcement of the settlement between Citigroup and the Justice Department is expected as early as next week -- Citigroup reports earnings on Monday. A $7 billion settlement would be higher than the $3 billion some analysts had previously expected, but lower than $10 billion the Justice Department had been demanding last month. The nearly all-cash settlement will include several billion dollars committed to helping struggling borrowers. Citigroup was up 0.49% in pre-market trading.

In other juridical news, Apple (NASDAQ:AAPL) lost a patent case in China after the Cupertino-based company took Shanghai-based Zhizhen Internet Technology and China's State Intellectual Property Office to court over claims that a Zhizhen's patent on voice-recognition technology was invalid. Apple claims it did not know about Zhizhen's patent before it introduced Siri, and the company does not believe it is infringing on the patent. Meanwhile, Apple has stirred some excitement after filing a new patent for a way to make an all-glass iPhone. Shares of Apple rose 0.03% ahead of the opening bell.

Alcoa (NYSE:AA) kicked off earnings seasons with positive second-quarter returns, beating expectations and delivering a positive outlook. The world's third largest aluminum producer returned to profit after losses in three of the previous four quarters. Losses were mainly due to costs associated with a restructuring. Alcoa's primary metal business posted a $97 million operating profit, versus $32 million a year ago. The company reaffirmed its 2014 global aluminum growth forecast of 7%. Shares of Alcoa rose 2.15 in pre-market trading.

British regulators have forced US drugmaker AbbVie (NYSE:ABBV) to retract comments made by CEO Richard Gonzalez in an interview with Reuters, which claimed investors in Dublin-based Shire PLC (NASDAQ:SHPG) were "generally supportive" of AbbVie's attempted takeover. AbbVie made its fourth bid for Shire on Tuesday, raising its offer to $51.3 billion after its earlier offers were deemed too low by the takeover target. Under UK Takeover Panel rules, a company cannot make claims such as Gonzalez did without written documentation from the shareholders. Shire was up 0.24% ahead of the open. AbbVie fell 0.18%.


While all eyes will be focused on the FOMC minutes due at 2:00 p.m., there are a few other events on today's economic calendar. MBA mortgage applications for home purchases rose 4% in the week of July 4, however year-on-year purchases remain weak. Refinancing applications moved higher by 0.4%. The EIA petroleum inventories will be reported at 10:30 a.m. The results of the $21 billion 10-year note auction will be reported at 1:00 p.m. An hour later, economists and investors will begin poring over every word out of Janet Yellen's and the FOMC members' mouths.

Global Markets

Asian stocks fell for a second day, led by Chinese stocks' steepest drop in three weeks. China's consumer price index was 2.3% higher than a year earlier, with a 0.1% on a monthly basis. Just below a 2.4% projection, the latest consumer price reading showed a moderate pullback caused by the 2.5% inflation rate imposed in May. China's producer price index was 1.1% lower than June 2013, registering a monthly decline of 0.2%. June's wholesale deflation is the smallest in over a year. In India, an economic survey said the economy is likely to grow in the range of 5.4% to 5.9% between 2014 and 2015.

In Europe, stocks moved lower trailing Portuguese bonds after Portugal's second biggest bank missed a debt payment. British house prices took an unexpected tumble in June after a rebound in May, falling 0.6% versus a 0.4% rise in the month prior. Brent crude was trading at a one-month low as many believe Libyan oil exports are set to redound.

Twitter: @brokawbrokaw
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